Insurance Contracts CP - Law Reform Commission

newspaper giving readers the benefits of insurance cover was held to have led to a concluded contract
when the reader completed a document providing the Daily Express with details of registration by way of
a letter posted in Dublin. No actual registration mechanism formed a part of the means of concluding the
contract.
7.37 A similar degree of flexibility is expected of the judiciary when doubts arise about the terms
upon which the contract has been concluded. An offer to take out standard insurance from a specific
insurer will impliedly constitute a willingness to contract on the insurer‘s usual terms of cover: Sanderson
v. Cunningham. 36 Where performance of the contractual obligations in respect of which insurance cover
is sought has begun, the fact that no contract documentation has been issued is irrelevant. 37 As long as
any subsequent documentation is in accordance with any verbal assurances and the usual terms, the
formal documents will be operative. It may of course not be possible to adduce parol evidence to add to,
vary or contradict the usual terms of cover. 38 Any contract documentation that seeks to delay the
commencement of a contract until a stated event such as the payment of the first premium 39 or the
delivery of the policy 40 may however negative a contract on the basis that until delivery of the premium or
the policy, as the case may be, there is no animus contrahendi and the event will be viewed as condition
precedent to the existence of the contract.
7.38 Where an insurance contract is concluded on the basis of a mistake, the question whether the
mistake is operative is determined by the standard rules of common law and equity, 41 including those
applicable to the remedy of rectification. 42
7.39 These factors persuade the Commission that there is no need to introduce a formalities
requirement into Irish law. For the sake of greater clarity on this question, the position of the authors of
the PEICL on this point, should be adopted. Article 2:301 provides, under the heading, ―manner of
conclusion‖:
―An insurance contract shall not be required to be concluded or evidenced in writing nor subject
to any other requirement as to form. The contract may be proved by any means, including oral
testimony.‖
7.40 The Commission provisionally recommends that legislation should provide that it is not a
necessary pre-condition to the validity of an insurance contract that it be in writing. The contract may be
proved by any means, including oral testimony.
(2) The Provision of a Policy Document
7.41 While the Commission does not see any need for rules requiring a contract to be concluded or
evidenced in writing, a general requirement that the policy itself should be provided to the insured, along
with the contractual details that must be furnished prior to the conclusion of the contract, seems to be
unobjectionable as a general principle. The authors of the PEICL provide in Article 2:501 that the policy,
and the twelve items listed in Article 2:301 (insofar as they are not included in the policy) should be
issued to the proposer ―when concluding the insurance contract‖.
7.42 On the assumption that the insurer has provided the pre-contractual information in a timely
manner, the question that arises is whether the obligation to issue the policy document should be
contemporaneous with the conclusion of the contract, as the PEICL envisages. This is, in the view of the
Commission, a rather onerous obligation, particularly in sectors where preliminary cover is sought or
documents need to be prepared or reviewed. For this reason, the Commission would suggest that the
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[1919] 2 IR 234.
Slattery v CIE (1972) 106 ILTR 71.
S.E. Lancs Insurance Co. v. Croisdale (1981) 40 Lloyd‘s Rep. 22.
Canning v Farquhar (1886) 16 QBD 727.
See MacGillivray, para. 2-048.
Stapleton v Prudential Assurance (1928) 62 Ll LR 56: Kyle Bay Ltd v Underwriters [2007] EWCA Civ 57.
Eg Irish Life Assurance Co v Dublin Land Securities [1989] IR 253.
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